Sign up to save tools and stay up to date with the latest in AI
bg
bg
1

Insight VC describes Databricks' wild $10B deal and the bad advice the CEO ignored | TechCrunch

Dec 18, 2024 - techcrunch.com
Databricks recently completed a record-breaking $10 billion fundraising round, led by Insight Partners and five other firms, including new investor Thrive. The deal, initially projected at $8 billion, quickly escalated to $10 billion with a $62 billion valuation due to high institutional demand. This round surpasses OpenAI’s previous record and involved a significant secondary tender offer, allowing existing shareholders to sell shares while issuing new preferred shares to new investors. Insight Partners, an existing investor, had to utilize its Public Equities fund to participate in the deal, highlighting the intense interest in Databricks as a generational company in the data, AI, and ML sectors.

Databricks, founded in 2013, initially gained traction with its Spark technology during the big data trend. Despite initial skepticism, the company successfully entered the data warehousing market in 2020 with Databricks SQL, becoming a strong competitor to Snowflake. The rise of large language models has further increased demand for Databricks' high-quality enterprise data solutions. By the end of its fiscal fourth quarter in 2024, Databricks expects to achieve a $3 billion revenue run rate, with Databricks SQL contributing $600 million, marking a 150% increase for the year.

Key takeaways:

  • Databricks raised a record-breaking $10 billion in funding, with Insight Partners and Thrive among the leading investors.
  • The fundraising round saw a rapid increase in valuation, closing at $62 billion, highlighting significant institutional demand.
  • Databricks' strategic pivot to data warehousing with Databricks SQL positioned it as a strong competitor to Snowflake, especially with the rise of large language models.
  • By the end of its fiscal fourth quarter, Databricks aims for a $3 billion revenue run rate, with Databricks SQL contributing significantly to this growth.
View Full Article

Comments (0)

Be the first to comment!